Golden Parachutes: Incentive Aligners,Management Entrenchers,or Takeover Bid Signals?

In this paper we investigate the effect of golden parachute (GP) adoptions on shareholder wealth. We control for the potential effect a GP adoption has on the probability that a firm will receive a takeover bid by investigating the wealth effects for firms that are in play when the GP is adopted. We find that announcements are wealth neutral when firms are in play and wealth increasing when firms are not in play when a GP is adopted. The results suggest that GPs have no influence on the success of a tender offer, refuting the hypotheses that they either align manager and shareholder interests or that they entrench inefficient managers. The difference in the results for in-play and not-in-play firms is consistent with the hypothesis that GPs signal an increased likelihood that a firm will receive a takeover bid.     

Empirical testing of alternative price spread models in the South African maize market

Reduced-form price spread models have been recently utilized by Wohlgenant and Mullen, and Thompson and Lyon to evaluate the economic factors affecting the marketing margins for agricultural products. Drawing on Gardner, Heien, Buse and Brandow, Waugh, Tomek and Robinson, and others they specify alternative retail-farm price spread models and attempt to determine which best fit the data in the context of underlying theoretical rationale. This paper continues in the spirit of Wohlgenant and Mullen, and Thompson and Lyon by evaluating alternative specifications of the retail-farm price spread for white maize in South Africa. However, several important differences do remain. Wohlgenant and Mullen analyzed the price spread for beef using annual data, while Thompson and Lyon modeled the price spread for oranges using weekly data. The time period under consideration can be expected to affect the choice of model because fixed markup rules that might be evident using a short-run period of analysis (e.g., Thompson and Lyon) become untenable over the long run with underlying supply and demand shifts. In this paper, monthly data, which may be interpreted as an intermediate-run period, are used along with dichotomous supply-demand shifters. In addition, Brorsen et. al. have shown that price uncertainty affects the price spread in the marketing channels of agricultural commodities. Thus, the analysis in this paper extends the framework of Wohlgenant and Mullen, and Thompson and Lyon to include measures of price risk. Finally, like Brorsen et. al. this study pertains to the grain market, while Wohlgenant and Mullen, and Thompson and Lyon studied the marketing margin for non-storable commodities.     

Political scrutiny and earnings management in the oil refining industry

The fortunes of the oil refining industry have historically been tied to the political process. In periods of high gasoline prices public outcry increases pressure on the political process to increase regulation, taxation, and other costs on the industry. This study explores the relationship of gasoline prices and oil firm earning with accounting earnings management of oil firms. Findings indicate that firms make accounting changes and discretionary accruals to decrease (increase) earnings in periods when gasoline prices and oil firm earnings are rising (falling).     

Do Mothers Matter? A Comparison of Models of the Influence of Mothers' and Fathers' Educational and Occupational Status on Children's Educational Attainment

The first objective of this article is to clarify which model best captures the structure and trend of the influence of social origin on children's education. The second objective is to analyse how general conclusions on historical trends in educational reproduction change if we add mother's status background to the model. Six contrasting hypotheses are derived fromthe body of literature dealing with models on families' socioeconomic status. All hypotheses are translated into empirical models and their explained variance is compared. A pooled data set is used that contains data from the Netherlands, West Germany, and the USA. The Modified Dominance Model, that distinguishes the influence of the highest from thelowest status parent, has the best model fit. Regarding the second objective we see that adding the mother's influence to that of the father's does not change general conclusions on trends in educational reproduction. Over time the influence of both parents decreases continuously. However, the influence of the mother's education and occupational status on children's educational attainment is substantive.     

Social economics and economics imperialism

Address delivered at a session on April 2, 1993 at the Midwest regional meetings of the Association for Social Economics, Indianapolis, IN.     

A longitudinal study of the cause and consequences of changes in diversification in the U.S. pharmaceutical industry 1977–1986

The paper hypothesizes that diversification by firms based in the pharmaceutical industry during the 1977-86 time period was primarily undertaken to reduce the risks associated with being dependent upon a technologically dynamic environment. Consistent with this non-efficiency motive for diversification, declining economic performance is predicted. A longitudinal empirical analysis provides support for these propositions.